New Delhi: The Union Cabinet has approved an equity infusion of Rs 5,000 crore into the Small Industries Development Bank of India (SIDBI) to strengthen its capital base and expand credit support to micro, small and medium enterprises (MSMEs).
The capital support will be provided in a phased manner. Equity will be infused at a book value of Rs 568.65 per share as on 31 March 2025, followed by additional tranches of Rs 1,000 crore each in FY 2026–27 and FY 2027–28 at the book value as on 31 March of the respective preceding financial years.
Post infusion, the number of MSMEs receiving financial assistance from SIDBI is expected to rise from 76.26 lakh at the end of FY 2025 to around 102 lakh by FY 2028, adding nearly 25.74 lakh new beneficiaries. As per the latest data available on the Ministry of MSME’s official website as of 30 September 2025, 30.16 crore employment is generated by 6.90 crore MSMEs, implying an average of 4.37 persons per enterprise.
Based on this average, employment generation from the additional MSME beneficiaries is estimated at about 1.12 crore by FY 2027–28.
The government said the capital infusion is necessary as SIDBI’s risk-weighted assets are expected to rise with increased direct lending, expansion of digital and collateral-free credit products, and venture debt support for startups.
The additional equity will help SIDBI maintain a healthy Capital to Risk-weighted Assets Ratio, protect its credit rating, and raise funds at competitive rates to support MSMEs more effectively.
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